Tug of War Continues: Elan vs. Royalty

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The latest development in a two-month tug of war between Elan and Royalty Pharma has Elan flat-out rejecting Royalty’s most recent offer for the company. The battle has revolved around Royalty’s incessant offers to purchase Elan despite the latter’s opposition to the proposed takover. Just one week ago, Royalty made $7.3 billion offer to buy Elan.

Today, Elan reports that its board of directors, after “careful review and consideration”, has determined that Royalty Pharma’s offer to acquire all of the shares of Elan for $11.25 or less per share, substantially undervalues the company.

“The offer from Royalty Pharma grossly undervalues Elan’s current business platform and our future prospects,” comments Robert A. Ingram, chairman of Elan. “As a result the board unanimously and without reservation rejected the offer.”

The board says it will, in accordance with Irish Takeover Rules, communicate with shareholders again following publication of Royalty Pharma’s formal offer document. Elan’s financial advisors are Citigroup, Morgan Stanley, and Ondra Partners, and its legal advisors are A&L Goodbody and Cadwalader, Wickersham and Taft.